The Financial Ombudsman Service (FOS) has published its annual review for the 12 months to March 31 2017, and once again payment protection insurance (PPI) complaints accounted for more than half of its workload. This type of insurance has dominated the financial services complaints landscape in recent years, and in the 2016/17 financial year, 168,769 of the 321,283 new complaints were about PPI, accounting for 52.5% of the total.
The final PPI complaints total was down by around 10% when compared to the previous year, with the overall number of complaints falling by around 6%.
Claims management companies (CMCs) are still responsible for a large proportion (84.5%) of the PPI cases received by the FOS. CMCs appear to be less active in pursuing packaged bank account (PBA) claims, however, with only 37.5% of the year’s PBA complaints being made via a CMC, down from 62% in the previous year. The overall number of PBA complaints is down by 54% in 2016/17 when compared to 2015/16.
Payday loan complaints rose by 227% from 3,216 in 2015/16 to 10,529 in 2016/17. In 2014/15, there were only 1,157 complaints made to the FOS about these loans, so complaint numbers have risen by a factor of nine in just two years.
The overall number of consumer credit complaints rose by 89% to 25,984 – large increases have also been recorded in the numbers of complaints being received about instalment loans (up by 318%) and guarantor loans (up by 182%). These figures should serve as a warning to credit firms from all sectors – your customers are increasingly willing to make a complaint about you, and if you can’t demonstrate that you are treating your customers fairly, then you could end up having to pay significant sums in compensation when complaints are settled.
Although just 0.5% of the complaints received during the 12-month period were made against independent financial advisory firms, advisers would do well to note certain statistics from the FOS review. Complaints about pensions, including Self Invested Personal Pensions (SIPPs) are on the increase. Issues over the SIPP advice he was given were central to the recent claim made against his financial adviser by former England footballer Alan Shearer. The BBC pundit has reached an out-of-court settlement after launching a £9 million damages claim against his adviser Kevin Neal and pensions firm Suffolk Life.
As regards the separate statistics regarding how many complaints the FOS upheld during the financial year, 64% of SIPP complaints were decided in the complainant’s favour, while for payday loans the uphold rate was 59% and for PPI it was 53%. Across all product areas, 43% of complaints were upheld.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.